☕️ Droneshield doubt

Good morning.

DroneShield's meteoric rise has sparked scepticism in some quarters, even drawing parallels to the ill-fated Cettire.

The defence tech company’s impressive backlog of orders and cutting-edge advancements in AI and drone defence have captivated retail investors, but professional sceptics see a bubble.

Case in point is Rodney Forrest of Sublime Fund Management, who tells Capital Brief’s Jack Derwin he is shorting the stock, arguing the valuation is unsustainable, pointing to cumulative losses of $40m and insider sell-offs at just 70 cents per share.

In a searingly tense global geopolitical environment, a DroneShield bet sure looks appealing. Forrest points out, though, those jumping on the DroneShield bandwagon now may be paying a high price for perfection.

🏆 LOI Subscriber #TBD

Market movers

Lifestyle Communities shares plunged over 18% on Monday after the ABC exposed grievances from some 80 residents of the land lease operator who accused the company of unethical practices at a Melbourne project.

From exorbitant fees, misleading marketing and even charging rent from deceased estates— the alleged grievances turned the promised 'resort-style living' into a financial trap.

Lifestyle defended its practices, claiming fee transparency. But the PR nightmare intensified as investors recoiled from the company's tone-deaf 'Miss Lonely' marketing comms. Yikes!

The quick sync

• Suspended from trading after botching its own capital raise, the National Stock Exchange has been stuck negotiating with the regulators for weeks as it tries to restore its tarnished reputation. (Capital Brief)

• Melbourne software company HammerTech lands $105m investment from Californian private equity shop Riverwood Capital. (AFR)

• 'We're cautiously optimistic': Australian crypto investors prepare for Trump 2.0. (Capital Brief)

• Australia’s youngest billionaire Edward Craven, local tech firm EasyGo Solutions made more than $500m in profits in three years, documents show. (The Australian)

• Foxtel Group and Fox Entertainment have struck a deal that will see the two companies identify and develop new screen programming for Australian and US markets. (Capital Brief)

Trading floor

M&A

• APM Human Services secured $950m from Goldman Sachs to retire its existing corporate facility. (Capital Brief)

• AirTrunk's sale could exceed expectations, with strong interest from major investors, advised by Goldman Sachs and Macquarie. (AFR)

• Speculation is rife in the Australian mining sector about a potential merger between Gold Road Resources and Regis Resources, supported by recent share price increases. (The Australian)

• Quadrant Private Equity has hired Houlihan Lokey to review Prime100, a major supplier to Greencross’ Petbarn. EBOS has expressed early interest in the premium pet food company. (AFR)

• The rivalry between Crescent Capital and Genesis Capital for Pacific Smiles has eclipsed the deal itself. (The Australian)

• Adamantem Capital has hired Luminis Partners to sell Hellers from its first fund amid pressure to return capital to investors. (AFR)

• Atturra is acquiring Exent, an IT consultancy, for $6m in cash, with a potential $2m earn-out. (BNA)

• Skip Capital, owned by Atlassian's Scott Farquhar, will back J-Power's $380m bid to acquire Genex Power. (AFR)

• Energy and Minerals Group, the largest shareholder of Coronado Global Resources, has received offers for its majority stake after a failed deal with Sev.en Global Investments. (The Australian)

• Liontown Resources signed a short-term supply deal with Beijing Sinomine International Trade, adding to recent agreements as it increases production at the Kathleen Valley lithium mine. (Capital Brief)

• Investment banks are optimistic about M&A financing as the ASX hits record highs, expecting listed companies to leverage equity markets for growth amid the market's upward momentum. (AFR)

Capital Markets

• The Star Entertainment Group shares dropped after suspending electronic gaming machines and table games at three properties due to performance issues following a system upgrade. (Capital Brief)

• Bellevue Gold shares dropped after meeting the midpoint of its production guidance for the first half of the year, amid steady gold prices. (Capital Brief)

VC

• ExoFlare, founded by Adrian Turner and Chris Aitken, is supported by Woolworths' W23, Harris Farm, Robyn Denholm's family office, and Salus Ventures. (AFR)

• JigSpace, a Melbourne AR startup, secured $13m led by Breakthrough Victoria. (Smart Company)

• EVP, a Sydney VC firm, raised $20m in four days for its fifth fund, targeting early-stage software investments in Australia and New Zealand. (AFR)

People moves

• Newcomer Canopy Investors hires Magellan analyst Jack McManus as portfolio manager. (AFR)

• Alvarez & Marsal hires three EY team members to establish its local valuations sector, with Stewart leading the unit. (AFR)

• Under Mark Whelan, ANZ's institutional division has become a standout performer, boosting his CEO prospects, though governance and culture issues in the bank's markets operation cast a shadow on his legacy. (Capital Brief)

• Hugh Robertson leaves Bell Potter for Morgans, joined by colleagues, his son, and wife. (AFR)

Together with FinTech Australia

Australia’s largest fintech festival, Intersekt 2024, will be held on 18 - 19 September 2024

Intersekt gathers 1200+ Australian and global fintechs, banks, financial institutions, investors, policymakers, regulators, accelerators and advisors with the intent of examining the opportunities and challenges of the Australian fintech market.

A high-level agenda is now available, highlighting some of the new initiatives this year including pitch events and matchmaking to enable more networking and partnerships!

Get your tickets today and save up to $100 with early bird pricing. Early bird ticket sales end Friday 19 July 2024.

Visit intersektfestival.com for more information.

The watercooler